Abuja – December 12, 2023 – Viewpoint Housing News.
Housing Solution Fund (HSF), a local currency Real Estate Investment Trust (REIT), has successfully completed its first round of issuance as part of its N100 billion financing scheme.
The Securities and Exchange Commission-authorized fund was founded in partnership with development partners to offer creative, market-based solutions to increase housing demand and sustainably scale the housing supply. These solutions include investing in accessible, affordable, long-term home loans that are made available to qualified homebuyers in Nigeria through partnerships with participating lending institutions and pre-qualified housing developers.
The fund is sponsored by Shelter Afrique, a pan-African housing development financial institution, and is managed by FundCo Capital Managers, an alternative investment management firm. Other sponsors of the fund include insurance companies, FCMB Pensions, Fidelity Pensions, Radix Pension, Norrenberger Pensions, and Leadway Assurance.
There are an estimated 213 million people living in Nigeria. According to UN predictions, seventy-five percent of people will live in cities by 2050. To meet the increasing demand and urban migration, at least 700,000 units of housing will be needed annually over the next few decades.
Production is now anticipated to be fewer than 100,000 units annually, leaving an overall housing deficit of over 26 million units, with an annual increase of 900,000 units. An estimated N21 trillion ($23.4 billion) will be needed annually to close the housing deficit.
HSF’s primary objective is to ensure liquidity, affordability, and accessibility of the home loan market for potential homebuyers.
Chief Investment Officer of HSF Maurice Okoli stated: “We are happy to have finished our first series under our plan, which included a combination of insurance, pension funds, and direct foreign investment (DFI) investors. Through strategic agreements with important partners like InfraCredit, Shelter Afrique, Nigeria Mortgage Refinance Company (NMRC), and qualifying developers, we are convinced that our unique business model will play a critical role in growing the housing supply in the market. The goal of these collaborations is to greatly reduce the housing deficit while simultaneously maximising the impact of the money.
The broad participation demonstrates how the sector understands the HSF’s potential and how important it is to changing the housing finance environment in Nigeria.
he asserted that, The collaborative funding strategy of the fund aims to mitigate the fragmentation of supply-side and demand-side housing operations by promoting a symbiotic and complimentary relationship between the two types of intervention.
A robust pipeline of finished housing projects for the fund will be created on the supply side by qualified developers gaining access to financing for sustainable construction from domestic institutional investors and DFIs like Shelter Afrique thanks to guarantees from credit enhancement organisations like InfraCredit.
